First Quarter Results

Actual financial results and utilization for the quarter ended March 31, 2009:

    * Total revenue decreased 23.5%, to $14.9 million, compared to $19.5    million in the first quarter of 2008;  * Service revenue decreased 24.5%, to $13.6 million, compared to    $18.0 million in the first quarter of 2008;  * The decrease in first quarter service revenue was significantly    impacted by a reduction in spending related to certain of our    historically larger accounts in combination with a hesitation by    new and existing customers to commit spending on new projects    primarily due to current economic conditions;  * Gross profit was $4.6 million, or 31.2% of total revenue, compared    to $7.4 million, or 38.1% of total revenue in the first quarter of    2008;  * Gross profit margin related to service revenue was 33.4%, compared    to 40.7% in the first quarter of 2008;  * Utilization was 67.8%, compared to 77.2% during the first quarter    of 2008;  * Net loss amounted to $(0.5) million, or $(0.04) per diluted share,    compared to net income of $0.2 million, or $0.02 per diluted share,    in the first quarter of 2008;  * Adjusted EBITDA amounted to $(0.1) million, or $(0.01) per diluted    share, compared to $1.2 million, or $0.09 per diluted share, during    the first quarter of 2008; and  * Cash flow used in operating activities was $2.4 million, compared to    cash flow used in operating activities of $3.7 million during the    first quarter of 2008. 

Adjusted EBITDA and Adjusted EBITDA per Diluted Share are Non-GAAP financial measures. A reconciliation of these measures to their most directly comparable GAAP measures is included in the financial data accompanying this press release.

Business Trends; Outlook

"As reported with our year-end financial results, Edgewater proactively took steps to control operating expenses in light of a significant pullback in legacy account spending during the fourth quarter of 2008 and into the first quarter of 2009. While these measures have had the intended effect of reducing our overall operating expenses during the first quarter of 2009, our operating performance continues to be impacted by softness in spending for technology consulting amid a challenging economic environment," commented Shirley Singleton, Edgewater's Chairman, President and Chief Executive Officer.

Ms. Singleton continued, "In conjunction with the decrease in our quarter-over-quarter revenue, we have taken a thoughtful look at our operating needs and spending decisions. This review has been both broad and deep. To that end, we have been able to control our spending in the first quarter of 2009 and essentially managed to report breakeven Adjusted EBITDA, despite the decrease in revenue."

"In terms of the current environment, we are seeing a hesitation by some customers to either initiate new projects or enter into subsequent follow-on phases of recently completed projects. As our management team actively monitors and manages our business to our utilization and sales pipeline, we have proactively taken measures to control our costs for the long-term benefit of the Company and its stockholders. While the Company continues to add new customers and existing customers solicit proposals and requests for meetings, revenue has been negatively impacted. To that end, subsequent to the completion of the first quarter of 2009, the Company enacted further cost savings measures, including a reduction of our billable consultant headcount, targeted at maintaining operating costs in line with revenue expectations. The cost saving measures we have taken in 2009 will provide annualized savings of approximately $3.9 million, from which the Company will begin to recognize a benefit during the third quarter. Further, our balance sheet remains strong with $22.1 million in cash and marketable securities and our accounts receivable remain quite healthy. Edgewater's management team has managed through economic downturns in the past and will ensure that the Company is well positioned to manage through these tough times as well."

Ms. Singleton concluded, "To reiterate, we are taking the proactive steps necessary to position the Company for long-term success. We are focused upon building our sales pipeline. We have generated a fair amount of proposal activity in the first quarter that is now waiting for customer decisions. We anticipate that once economic conditions begin to improve, our sales pipeline will provide Edgewater with a catalyst to spur future growth. However, absent observable signs of economic recovery, we remain cautious with respect to our near-term performance. In terms of our outlook, the hesitation by customers, both existing and prospective, to commit funding for planned projects is expected to extend into the second quarter. As a result, we anticipate lower revenue during the second quarter of 2009, as compared to the first quarter."

First Quarter Conference Call Details

Edgewater has scheduled a conference call on Wednesday, May 6, at 10:00 a.m. (ET) to discuss its first quarter 2009 financial results and other matters. To listen to the call, you can participate by webcast at www.edgewater.com - Investor Relations section or you can dial 888-713-4215 (pass code 38904793). Investors are advised to dial into the call at least ten minutes prior to the call to register. Participants may pre-register for the call at www.theconferencingservice.com/prereg/key.process?key=P3C3NKU7D. Pre-registrants will be issued a pin number to use when dialing into the live call which will provide quick access to the conference by bypassing the operator upon connection.

A replay of the call can be accessed via Edgewater's website at www.edgewater.com - Investor Relations section or by dialing 888-286-8010 (pass code 31191528) from 12:00 p.m. ET Wednesday, May 6 through 11:59 p.m. ET Wednesday, May 20.

About Edgewater Technology, Inc.

Edgewater is an innovative technology management consulting firm. We provide a unique blend of specialty IT services by leveraging our proven industry expertise in strategy, technology and enterprise performance management. Headquartered in Wakefield, MA, we typically go to market both vertically by industry and horizontally by product and technology specialty and provide our clients with a wide range of business and technology offerings. To learn more, visit www.edgewater.com or call 800-410-4014.

The Edgewater Technology logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=3783

Safe Harbor for Forward-Looking and Cautionary Statements

This Press Release contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including statements made with respect to our 2009 outlook, future revenue, cost control efforts and customer spending outlook.